Abstract:
People needs are closely related to managing life, health and even investment risks,
both in personal life and business activities when carrying out insurance claims.
The insurance company will determine the appropriate estimated claim reserve
value to inform the insurer of its company's ability to pay. This claims reserve is
very important for insurance companies to pay compensation for claims that have
been reported and are eligible to be paid. Once a claim is reported, the insurance
company usually handles payment of the claim. However, policy holders often do
not immediately report claims regarding incidents to the insurance company. This
process can be said to be Incurred But Not Reported (IBNR). Incurred But Not
Reported is a claim that has occurred but has not been reported. So, insurance
companies need to reserve funds to pay compensation to policy holders. Several
methods that can be used to estimate IBNR include The Chain Ladder and
Bornhuetter Ferguson. In this research, IBNR reserves were calculated using AXIS
Capital Holding data based on incremental IBNR data with accident years 2011-
2020. The results of this research analysis show that the claim reserve value
generated using the Chain Ladder method is greater, namely USD 14,544,465 with
an RMSE value of 1,237,230 and Bornhuetter Ferguson with an Average Loss
Development Factor of USD 13,214,257 with an RMSE value of 1,235,835.
